Subsidies for the retirement and renewal of aged commercial freight vehicles can reach up to 140,000 Yuan! Two departments have jointed issued a circular

Recently, the Ministry of Transport and the Ministry of Finance jointly issued the Circular on the Implementation of the Retirement and Renewal of Aged Commercial Freight Vehicles (hereinafter referred to as the Circular) to accelerate the retirement of aged freight vehicles with high energy consumption and emissions by providing subsidies for the retirement and renewal of aged commercial freight vehicles.

The Circular clarifies the scope of subsidies and implementation period. It supports the retirement of commercial diesel freight vehicles with Euro III emission standards and below and the acceleration of the renewal of a batch of high-standard, low-emission freight vehicles. Subsidies will be provided in tiers for the retirement of commercial diesel freight vehicles with Euro III emission standards and below ahead of schedule, the retirement and replacement with Euro VI emission standard vehicles or new energy vehicles ahead of schedule, and the purchase of eligible new energy vehicles. Vehicles that have already received support from other central funding sources will not be included in the scope of this subsidy. The implementation period for the above subsidy policy is from the date of issuance of the document to December 31, 2024.

The Circular clarifies the subsidy standards. Differentiated subsidy standards will be adopted for the retirement and renewal of aged commercial freight vehicles based on factors such as the type of retired vehicle, the timing of retirement ahead of schedule, and the power type of the newly purchased vehicle.

The Circular clarifies the funding channels and disbursement methods. The subsidy funds for the retirement and renewal of aged commercial freight vehicles will be jointly borne by the central and local governments in a 9:1 ratio. The central government’s share of the subsidy will be 85% for the eastern region, 90% for the central region, and 95% for the western region. Provincial-level finances shall allocate supporting funds in proportion based on the distribution of central government funds.

Provincial-level transportation departments, in collaboration with finance departments at the same level, shall submit the annual target tasks, funding requirements, and supporting funds plans for the retirement and renewal of aged commercial freight vehicles to the Ministry of Transport. The Ministry of Transport will consolidate and review the subsidy fund requirements submitted by each province and report the subsidy fund allocation recommendations to the Ministry of Finance. The Ministry of Finance will allocate funds to provinces in batches based on the annual target tasks and established subsidy standards verified by the Ministry of Transport, in line with the funding allocation recommendations from the Ministry of Transport. 60% of the required central government subsidy funds for 2024 will be allocated as the first batch to provinces to support local efforts in advancing relevant tasks. Provincial-level finance departments, in coordination with transportation departments at the same level, shall refine the allocation and usage plan of the funds and submit it for record to the Ministry of Finance and the Ministry of Transport, with copies sent to relevant supervisory agencies of the Ministry of Finance. The Ministry of Transport will consolidate and review the actual disbursement of subsidy funds reported by provinces and, as needed, provide recommendations for subsequent subsidy fund allocations. The Ministry of Finance will consider the annual budget allocation when distributing the funds.

Provincial people’s governments must fulfill the main responsibility for the retirement and renewal of aged commercial freight vehicles, formulate implementation plans and special management regulations, clarify the division of tasks among relevant departments, refine and implement specific measures, enhance coordinated efforts, promptly allocate funds, and ensure the timely completion of established target tasks. Meanwhile, they should be responsible for the authenticity and accuracy of the data reported. Provincial people’s governments are the primary responsible entities for fund management and must ensure strict oversight of the funds to ensure that they are not used to balance local budgets, repay local government debt, cover expenditures for ensuring basic living standards, maintaining wages, and supporting operational needs at the local level, nor raise supporting funds through borrowing. Provincial transportation departments, in coordination with finance departments, shall submit monthly reports on the achievement of performance targets to the Ministry of Transport and the Ministry of Finance, and carry out ad hoc inspections on the allocation and implementation outcomes of the subsidy funds.

Applicants should be responsible for the authenticity and accuracy of the submitted materials. Any use of improper means to obtain subsidy funds will be strictly dealt with by the transportation and finance departments of the vehicle owner’s place of residence in accordance with their respective responsibilities under relevant laws and regulations. Those who constitute a criminal offense will be held criminally liable in accordance with the law.